PROFITABLE ACQUISITION: M DEVELOPMENT CAPITALIZES ON HOFFMANN NAPLES PORTFOLIO

17 PROPERTIES SOLD AT A LOSS IN BULK PURCHASE

By Justin Ankney, CCIM

Just over one month ago, exciting news emerged as the Hoffmann family successfully concluded the sale of a substantial portion of their Naples commercial real estate portfolio, with 27 properties involved in the transaction. Most of the properties are trophy assets located in the heart of downtown Naples on some of the most alluring streets in Florida.

Both the buyer and seller were mum on the details. Industry experts, according to Tim Aten’s Gulf Shore Business write up, speculated that the sale price could be between $250 million and $300 million. There was widespread agreement that this would be an epic sale, one of the largest ever in Collier County, and the buzz in our community was high. In Aten’s article, Mr. Hoffmann himself referred to the deal as “monumental.”

At the time of writing, 25 of those transactions appear in the Collier County Property Appraisers site, for a total sale price of $174,818,800. That’s a net gain of $12,497,300 so far.

17 of the 25 properties were sold at a loss. The average holding period for those properties was over 6 years.

There are still two more properties to discover, and maybe the final ones are massive gains. All sellers have different motivations and the Hofmann’s were clear in their statement that they will be investing in businesses rather than real estate – and who can blame them considering how successful they have been. Yet it’s still surprising how some of these deals penciled out given the robust real estate market in the last 6-7 years. It appears that M Development made a great acquisition, and we are excited to see what they have in store for Naples, FL.

Justin Ankney, CCIM is a Senior Advisor with Mayhugh Commercial Advisors specializing in Commercial Real Estate throughout Southwest Florida.